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iPhone games may have had an even more significant impact on the handheld gaming market than previously thought, growing share at the expense of the DS and - more drastically - the PSP.

That's according to calculations made by analytics site Flurry using sales data from NPD and Apple, which note that iPhone games accounted for five per cent of the total US portable software market in 2008, while DS took a 75 per cent slice, and PSP 20 per cent.

By 2009, iPhone's share looks to have grown to 19 per cent of the total portable market, while PSP shrunk to just 11 per cent, and DS declined to 70 per cent.

That portable category was thought to be worth an estimated $2.25bn in 2008 and $2.55bn in 2009. The site estimates iPhone game revenue accounted for $115m and $500m in each year respectively.

Pitting the Apple device's standing in the overall console market, the site calculates iPhone took an estimated 1 per cent of overall share of the console market in 2008 and 5 per cent in 2009.

That revenue excluded any made through online services such as virtual goods, social network games and subscription fees.

In comparison, the portable sector took a 20 per cent share of the market in 2008 and a 24 per cent share in 2009, while the home consoles accounted for 79 per cent in 2008 and 71 per cent in 2009. Figures that indicate a loss in ground by the home consoles to the portable category.

Overall revenue made from console software in 2008 was $11bn, while in 2009 it was $9.9bn.

"Controlling 5 per cent revenue of a $10 billion industry in just a year and a half is significant," noted the site.

"Our main finding is that iPhone (and iPod touch) is a gaming platform to be reckoned with," it added.

"From a market share perspective, console games lost ground to portable platforms and iPhone. While the downturn in the economy may have dampened sales of the more expensive console games category, there is no denying that iPhone has generated substantial revenue and entered strongly into a mature industry.

"As prices come down for the iPod Touch, and games sold through the App Store continue to have lower price points, more of the young gaming generation may switch to Apple devices over Sony PSP and Nintendo DS for gaming."

Nintendo has previously denied that Apple's business is impacted on the DS, saying it doesn't go after the same "affluent" consumers as Apple.

"It is true that the current Nintendo DS business is not that heated up as it used to be sometime ago, when no one could tell how far ahead DS might be able to grow," Nintendo president Satoru Iwata said at the end of 2009.

"On the other hand data [has shown] that DS has not lost its footing at all. Actually it has been even increasing its footing all around the world."

"Because the original iPod business itself was big, my view is that Apple was able to leverage a very good timing to expand its business to telephones just when the original iPod business was nearing its saturation point.

"In other words, in my opinion, iPhone did not grow itself to a huge business, but something already grown up was able to prevent its growth speed from slowing down," he added.

It is estimated that over 30,000 games have been released onto the App Store since its launch in 2008.

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4 Comments

Hardly surprising. The DS and the PSP have their limitations as mobile "lifestyle" devices compared to the iPhone. Would you rather have a Swiss Army Knife by your side, or simply a penknife? People would rather spend less money on entertainment devices and more money on entertainment. Plus, the iPhone can do many other things that the DS and the PSP can't quite do (like make phone calls and surf the Internet).

But the games on the DS are made to last more of the time as it was just build for games. ((some of the RPG have done well in my view))
Most Phone games are made to pass the time right? ((no idea about iPhone as i do not have one))

Some time a tool that made for one thing is sometime better then a tool that can do it all

DoodleJump on the iPhone stated they just sold 3 million copies, and believe they are the number 2 app all-time on the iPhone. At .99/copy that is around $3 million US dollars.

There are many DS titles that have sold more than 3 million copies (a few in the 10s of millions) and at $30/piece. 20 million copies x $30 = $600 million (that's the rough number for NSMB DS).

I love the iPhone market, and making games for it. It's very accessible, easy to make games for the whole world, and a fun device to play with. However, it has a LOT lower ceiling than the handheld consoles (DS/PSP) at present. No major company is going to invest lots of money in iPhone development when the revenue ceiling is in the single-digits of millions.